29 November, 2016
Concerns in relation to “modern slavery” are increasingly important for businesses to recognise. This is especially so in Asia, where poor enforcement mechanisms and unfamiliarity with employee rights often result in exploitative working conditions. What can companies do to ensure that their business and supply chains are free from unethical labour practices?
What is modern slavery? Modern slavery can take many forms besides the traditional concepts of slavery and servitude.
Forced or compulsory labour, which refers to work or service exacted from an individual under threat of a penalty and which the individual did not offer to perform voluntarily, is often considered modern slavery. Modern slavery can also take the form of child labour or debt bondage, or even exploitative working conditions from which employees cannot voluntarily leave.
The issues of forced labour and exploitative working conditions in particular have been in the spotlight recently in Asia, in light of highprofile claims brought by employees against multi-national organisations for breaches of their labour obligations.
Working hours, overtime pay and other obligations In September, workers employed by a chicken farm in the Lopburi region of Thailand commenced an action against Betagro, a major poultry supplier for European markets, for breaches of various labour obligations including non-payment of overtime. The workers had alleged that they were made to work 22-hour shifts shovelling litter and taking care of chickens, were subject to unsanitary working conditions without proper equipment, and had “rent” deducted from their wages even though they slept with the chickens they cared for. The workers first commenced action in the labour courts against the farm, which was eventually ordered to pay 1.7 million baht (around US$49,000) in backwages, including for overtime pay. The workers are appealing the award, and have also separately commenced a separate action against Betagro demanding 46 million baht (around US$1.33 million) in compensation. Betagro, on its part, has since suspended ties with the chicken farm in question. This case is an interesting one for both businesses and HR professionals to note as it illustrates how breaches of labour obligations and exploitative working conditions can result in accusations of modern slavery. Various labour law issues arose in this instance, including breaches of maximum working hours, rest breaks and rest days, deductions from wages, non-payment of wages and overtime pay, wages being set below the applicable minimum wage, and workplace health and safety concerns.
Of key concern is that Betagro, which was not involved in the day to day management of the farm, now finds itself party to damaging and costly litigation. Foreign workers There are also particular issues in relation to foreign workers when it comes to modern slavery. Foreign workers are often recruited overseas and sent to work with little awareness of their rights as employees. This is exacerbated by the language barriers foreign workers often face when moving to a new country, a factor which is often exploited.
In October FNV, a Dutch trade union, announced that it would be taking steps to commence an action against FIFA, the international governing body for football, on behalf of number of foreign workers who had been employed in Qatar on World Cup related projects. The proposed suit also involves a Bangladeshi worker, Nadim Shariful Alam, who had worked on a project in Qatar but was dismissed and deported. FNV and Mr Alam allege that FIFA acted wrongfully by awarding the 2022 World Cup to Qatar without demanding the assurance that Qatar observes fundamental human and labour rights vis-à-vis migrant construction workers. The proposed suit is primarily aimed at addressing working conditions faced by foreign workers under Qatar’s kafala sponsorship system, and the various breaches of labour obligations faced by such workers while working in Qatar on
World Cup projects. Mr Alam, for example, alleged that he had to pay a “recruitment fee” in order to find work in Qatar and that his passport was seized on arrival. Other foreign workers have disclosed that they were made to sign a blank piece of paper when recruited but were shown another document as their contract of employment, and upon arrival in Qatar were informed that they would be paid at a lower wage than promised by their recruiters or were required to perform different work. Businesses and HR professionals should note that the issues highlighted in the proposed suit are not confined only to Qatar, but occur in the engagement of foreign workers throughout the rest of Asia as well. “Recruitment fees” and the retention of passports by employers, in particular, are illegal in many jurisdictions (including Qatar), as are abusive contracts (where, upon arrival, foreign workers are informed that they will be receiving lower wages than originally agreed upon) and the practice of contract substitution (where, upon arrival, a migrant worker is forced to do a different kind of job than he was promised back home).
Key takeaways Quite apart from concerns relating to compliance with labour law obligations, the cases noted above also illustrate the reputational risks businesses can face when human rights issues are raised. The implementation of human rights and sustainability reporting obligations in the region (and globally) is a signal that consumers have started to consider these issues as an important differentiating factor between businesses, and the obligations themselves may require companies in Asia to report on their practices locally or as part of their parent companies’ reporting obligations. Companies will therefore need to consider human rights and modern slavery issues carefully.
It is prudent to ensure that you have processes or standards in place to deal with complaints swiftly when raised and take proactive steps to ensure that the welfare of workers – whether or not they are your employees – is adequately safeguarded.
For further information, please contact:
Fatim Jumabhoy, Of Counsel, Herbert Smith Freehills LLP
fatim.jumabhoy@hsf.com
